Growing Your Professional Service Firm For Show or Dough?
Or are you building it for size or profit?
Imagine a weasel. Imagine that little demon of destruction, that insensate courage, tireless activity and incredible agility. Multiply this might some fifty times and you have a wolverine. Do you know that this little animal (some 45 lbs) can make the mighty grizzly bear (some 1,000 lbs) run for his life hysterically crying for his mother?
And this is where the wolverine story ends and our story begins. But to demonstrate how this relates to the growth of professional service firms, for a moment we’re going to talk about how weight training builds muscle in humans because there is a dangerously high number of professional firms grow that grow the wrong way.
First consider bodybuilders. They are building muscle for show. Muscle for size. Muscle for parade. Muscle for impression.
Now consider athletes. They are building muscle for strength. Muscle for power. Muscle for specific functions.
So, now let’s look at the structure of the muscle and how bodybuilders’ and athletes’ approaches differ when it comes to building muscle.
Imagine the muscle as a package of spaghetti. The individual spaghettis are the muscle fibres, known as myofibrils. The package, called sarcoplasm, is the sheath enveloping the spaghettis, the individual muscle fibres.
And here is the difference.
Athletes, who train for muscle function, strength and power, grow the size of the spaghettis inside the sheath, and the sheath grows naturally as the muscle fibres grow. The sheath is always tightly packed with muscle fibres. This is called myofibrillar muscle growth, that is, muscle growth for function.
Bodybuilders on the other hand train for muscle size. They are growing the size of the sheath itself with little consideration for the real muscle fibres inside. And all the space that is not occupied by muscle fibres is filled with water. Not really water, but all sorts of fiendish body fluids. This is called sarcoplasmic muscle growth, that is, muscle growth for show and parade.
So, now we can go back to professional firms and consider how they grow.
First consider the “bodybuilder” firm. Just as sarcoplasmic muscle growth, the growth of the sheath itself, requires high volume of training to create size for show, so operate bodybuilder type firms. They have lots of people, incredible level of busy-ness, lots of clients and preponderance of projects. Everyone is running around like a headless chicken. People are busy doing client work, writing proposals and running around chasing new prospects. These firms operate on high volume and, well you’ve guessed it right, low margins. They have impressive top indicators, like incredible gross sales and unimaginable number of billable hours. So, if you don’t look beyond the veneer, these firms can look truly impressive.
In contrast, let’s see the athletic professional firm. This type of firm trains with lower volume but uses heavier load for building functional muscles. This is myofibrillar muscle growth for function, strength and power, with little ragard for show. This firm focuses on growing the size and the number of its muscle fibres, knowing that the sheath with grow in response to fibre growth. As opposed to impressive top indicators, athletic firms have nice bottom indicators like net profit per person or net profit per project. They work systematically without chronic busy-ness and chaos.
Now let’s revisit the grizzly bear and the wolverine. How can this little creature spread fear among such mighty animals as grizzly bears? One is definitely agility. The other is body composition. While the wolverine is almost 100% pure muscle, a large chunk of the bear is fat.
Similarly, a large chunk of most professional firms is "organisational fat", including but not limited to the posh office at the upscale end of town, fleet of impressive company cars, super expensive mahogany desks, unnecessary business trips, luxury "strategy retreats" and excessive number of – often underskilled – staff members. And most of these firms, although looking big and impressive on the outside, are pitifully underperforming on the inside. Yes, they can brag about impressive billable hours and billing rates, but after the overheads and salaries are paid for, they have almost nothing left to show for.
It reminds me of a former classmate at university who walked around with a mobile phone on his belt to impress us (in 1988) but didn’t have money to actually get his phone connected to use it for any practical purpose. It was all for show and parade.
So, now my question to you is this: What kind of firm are you building? Are you building a dysfunctional muscle-bound behemoth or a functional, practical, agile, lean and mean athlete of a firm?
Do you build your firm for show or for dough? Do you build it for size or function? Does your firm have an essence, a core or is it all veneer? Is your firm more of a fat grizzly bear or an agile wolverine?